DSS reports larger loss, revenue dip in Q1

Document Security Systems Inc. posted a net loss of $3.1 million, or 7 cents a share, in its first quarter results, compared with $1.1 million (5 cents a share) during the first quarter of 2013.

The company attributed the loss to higher expenses associated with a merger with Lexington Technology Group Inc. last July.

Revenues dropped to $3.6 million from $3.8 million in year-over-year results, resulting from the timing of packaging orders, the company reported.

"While first quarter revenue was lower than expected due to the timing of a several packaging orders that slipped from March to April, our expectations for our Printed Products group in 2014 remain intact," said CEO Jeffrey Ronaldi. "Despite this timing issue, our Printed Products group continued to produce strong positive adjusted EBITDA results, which is an integral component of our corporate strategy."

Adjusted EBITDA loss, a non-GAAP metric, totaled $1.1 million, compared with an adjusted EBITDA loss of $398,000 in the first quarter of 2013.

Operating expenses increased by 36 percent, reaching $6.6 million, compared with $4.8 million in 2013’s first quarter. The cost of goods sold, without depreciation or amortization, was $2.2 million, flat from a year ago.

At the end of the quarter, the company had $3.4 million in cash, up from $2.5 million during the first quarter of 2013. The increase was due to $3 million in third-party funding, which was offset by $750,000 in IP investments.

Early this month the company hired California-based investment firm Liolios Group Inc. to lead its financial communications and investor relations program.

The company’s stock (NYSE MKT: DSS) was trading at $1.10 a share midday Wednesday, down nearly 8 percent from $1.19 at Tuesday’s close.